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  • Credit Risk Management by Ucbl

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    S.m. Kamran Pias
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    Credit Risk Management of U C B L & Analysis of the Data Risk Risk may be defined in terms of the variability of possible outcomes from a given investment. If the outcome is certain and there is no variability-hence no risk. Another way we can measure risk like a measure of uncertainty about the outcome from a given event. The greater the variability of possible outcomes on both, the high side and the low side, the greater the risk. Risk management Risk Management is a discipline at the core of every financial institution and encompasses all the activities that affect its risk profile. It involves identification, measurement, monitoring and controlling risks to ensure that a) The individuals who take or manage risks clearly understand it. b) The bank’s risk exposure is within the limits established by Board of Directors. c) Risk taking decisions are in line with the bank strategy and objectives set by BOD. d) The expected payoffs compensate for the risks taken. e) Risk taking decisions are explicit and clear. f) Sufficient capital as a buffer is available to take risk Risk Evaluation/Measurement Until and unless risks are not assessed and measured it will not be possible to control risks. Further a true assessment of risk gives management a clear view of bank’s standing and helps in deciding future action plan. To adequately capture banks risk exposure, risk measurement should represent aggregate exposure of bank both risk type and business line and encompass short run as well as long run impact on bank. To the maximum possible extent banks should establish systems / models that quantify their risk profile, however, in some risk categories such as operational risk, quantification is quite difficult and complex. Wherever it is not possible to quantify risks, qualitative measures should be adopted to capture those risks. Whilst quantitative measurement systems support effective decision-making, better measurement does not obviate the need for well-informed, qualitative judgment. Consequently the importance of staff having relevant knowledge and expertise cannot be undermined. Risk Management Process: UCBL always try to manage above risk by various steps like risk analysis, evaluation, acceptance and management of some risk or combination of risks. Risk management is emphasized not only for regulatory purpose but also to improve operational and financial performance of the Bank. The objective of the risk management is that the Bank takes well calculative business risks while safeguarding the Bank’s capital, its financial resources and profitability from various risks. In order to streamline risk control features in a more effective manner, UCBL has put in places all manuals as suggested in the core risk management guide lines of Bangladesh Bank. Its Standard Operating Procedure (SOP) contains all the guidelines and also includes some of the internationally accepted best practices. To manage the risk, united commercial Bank Limited takes some steps. They actively involve analysis, evaluation, acceptance and management of some risk. Risk management is not only for regular process but also improve financial performance of the Bank. UCBL manage their bank’s risk by taking following steps: Risk Credit Risk Operational Risk Market Risk Liquidity Risk Reputation Risk Risk Identification Identify, Understand and Analyze Risks Risk Assessment and Measurement Quantify and Assess Risk Impact Risk control and migration Recommend Measures to Control & Migrate Risks Risk monitoring Monitor and Report on Progress & Compliance Balance Risk against return The Risk management policy of the Bank operates under some broad pri

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    Credit Risk Management of U C B L & Analysis of the Data Risk Risk may be defined in terms of the variability of possible outcomes from a given investment. If the outcome is certain and there is no variability-hence no risk. Another way we can measure risk like a measure of uncertainty about the outcome from a given event. The greater the variability of possible outcomes on both, the high side and the low side, the greater the risk. Risk management Risk Management is a discipline at the core of every financial institution and encompasses all the activities that affect its risk profile. It involves identification, measurement, monitoring and controlling risks to ensure that a) The individuals who take or manage risks clearly understand it. b) The bank’s risk exposure is within the limits established by Board of Directors. c) Risk taking decisions are in line with the bank strategy and objectives set by BOD. d) The expected payoffs compensate for the risks taken. e) Risk taking decisions are explicit and clear. f) Sufficient capital as a buffer is available to take risk Risk Evaluation/Measurement Until and unless risks are not assessed and measured it will not be possible to control risks. Further a true assessment of risk gives management a clear view of bank’s standing and helps in deciding future action plan. To adequately capture banks risk exposure, risk measurement should represent aggregate exposure of bank both risk type and business line and encompass short run as well as long run impact on bank. To the maximum possible extent banks should establish systems / models that quantify their risk profile, however, in some risk categories such as operational risk, quantification is quite difficult and complex. Wherever it is not possible to quantify risks, qualitative measures should be adopted to capture those risks. Whilst quantitative measurement systems support effective decision-making, better measurement does not obviate the need for well-informed, qualitative judgment. Consequently the importance of staff having relevant knowledge and expertise cannot be undermined. Risk Management Process: UCBL always try to manage above risk by various steps like risk analysis, evaluation, acceptance and management of some risk or combination of risks. Risk management is emphasized not only for regulatory purpose but also to improve operational and financial performance of the Bank. The objective of the risk management is that the Bank takes well calculative business risks while safeguarding the Bank’s capital, its financial resources and profitability from various risks. In order to streamline risk control features in a more effective manner, UCBL has put in places all manuals as suggested in the core risk management guide lines of Bangladesh Bank. Its Standard Operating Procedure (SOP) contains all the guidelines and also includes some of the internationally accepted best practices. To manage the risk, united commercial Bank Limited takes some steps. They actively involve analysis, evaluation, acceptance and management of some risk. Risk management is not only for regular process but also improve financial performance of the Bank. UCBL manage their bank’s risk by taking following steps: Risk Credit Risk Operational Risk Market Risk Liquidity Risk Reputation Risk Risk Identification Identify, Understand and Analyze Risks Risk Assessment and Measurement Quantify and Assess Risk Impact Risk control and migration Recommend Measures to Control & Migrate Risks Risk monitoring Monitor and Report on Progress & Compliance Balance Risk against return The Risk management policy of the Bank operates under some broad pri

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    13 views2 pages

    Credit Risk Management by Ucbl

    Uploaded by

    S.m. Kamran Pias
    Credit Risk Management of U C B L & Analysis of the Data Risk Risk may be defined in terms of the variability of possible outcomes from a given investment. If the outcome is certain and there is no variability-hence no risk. Another way we can measure risk like a measure of uncertainty about the outcome from a given event. The greater the variability of possible outcomes on both, the high side and the low side, the greater the risk. Risk management Risk Management is a discipline at the core of every financial institution and encompasses all the activities that affect its risk profile. It involves identification, measurement, monitoring and controlling risks to ensure that a) The individuals who take or manage risks clearly understand it. b) The bank’s risk exposure is within the limits established by Board of Directors. c) Risk taking decisions are in line with the bank strategy and objectives set by BOD. d) The expected payoffs compensate for the risks taken. e) Risk taking decisions are explicit and clear. f) Sufficient capital as a buffer is available to take risk Risk Evaluation/Measurement Until and unless risks are not assessed and measured it will not be possible to control risks. Further a true assessment of risk gives management a clear view of bank’s standing and helps in deciding future action plan. To adequately capture banks risk exposure, risk measurement should represent aggregate exposure of bank both risk type and business line and encompass short run as well as long run impact on bank. To the maximum possible extent banks should establish systems / models that quantify their risk profile, however, in some risk categories such as operational risk, quantification is quite difficult and complex. Wherever it is not possible to quantify risks, qualitative measures should be adopted to capture those risks. Whilst quantitative measurement systems support effective decision-making, better measurement does not obviate the need for well-informed, qualitative judgment. Consequently the importance of staff having relevant knowledge and expertise cannot be undermined. Risk Management Process: UCBL always try to manage above risk by various steps like risk analysis, evaluation, acceptance and management of some risk or combination of risks. Risk management is emphasized not only for regulatory purpose but also to improve operational and financial performance of the Bank. The objective of the risk management is that the Bank takes well calculative business risks while safeguarding the Bank’s capital, its financial resources and profitability from various risks. In order to streamline risk control features in a more effective manner, UCBL has put in places all manuals as suggested in the core risk management guide lines of Bangladesh Bank. Its Standard Operating Procedure (SOP) contains all the guidelines and also includes some of the internationally accepted best practices. To manage the risk, united commercial Bank Limited takes some steps. They actively involve analysis, evaluation, acceptance and management of some risk. Risk management is not only for regular process but also improve financial performance of the Bank. UCBL manage their bank’s risk by taking following steps: Risk Credit Risk Operational Risk Market Risk Liquidity Risk Reputation Risk Risk Identification Identify, Understand and Analyze Risks Risk Assessment and Measurement Quantify and Assess Risk Impact Risk control and migration Recommend Measures to Control & Migrate Risks Risk monitoring Monitor and Report on Progress & Compliance Balance Risk against return The Risk management policy of the Bank operates under some broad pri

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    Bangladesh Standards on Auditing (BSA)

    Current Status of Adoption of ISA


    BSA
    200
    210
    220
    230

    Present Title
    Objective and General Principles Governing an Audit of Financial Statements
    Terms of Audit Engagements
    Quality Control for Audits of Historical Finance Information
    Audit Documentation
    The Auditor's Responsibility to Consider Fraud in an Audit of Financial
    240
    Statements
    250 Consideration of Laws and Regulations in an Audit of Financial Statements
    260 Communications of Audit Matters with Those Charged with Governance
    300 Planning an Audit of Financial Statements
    Understanding the Entity and Its Environment and Assessing the Risks of
    315
    Material Misstatement
    320 Audit materiality
    330 The Auditor's Procedures in Response to Assessed Risks
    402 Audit Considerations Relating to Entities Using Service Organization
    500 Audit Evidence
    501 Audit Evidence-Additional Considerations for Specific items
    505 External Confirmations
    510 Initial Engagements-Opening Balances
    520 Analytical Procedures
    530 Audit Sampling and Other Means of Testing
    540 Audit of Accounting Estimates
    545 Auditing Fair Value Measurements and Disclosures
    550 Related Parties
    560 Subsequent Events
    570 Going Concern
    580 Management Representations
    600 Using the Work of Another Auditor
    610 Considering the Work of Internal Auditing
    620 Using the Work of an Expert
    The Independent Auditor's Report on Complete Set of General Purpose
    700
    Financial Statements
    710 Comparatives
    720 Other Information in Documents Containing Audited Financial Statements
    800 The Auditor's Report on Special Purpose Audit Engagements
    1000 Inter-Bank Confirmation Procedures
    1004 The Relationship Between Bank Supervisions and Banks' External Auditors
    1005 The Special Considerations in the Audit of Small Entities
    1014 Reporting by Auditors on Compliance with International Financial Reporting

    Standards

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